The Main Ways To Invest In North Texas

1. Investing in a Real Estate Fund

Structure: Similar to a mutual fund, you buy shares in a professionally managed portfolio of properties (such as a collection of single family homes, apartments, or mixed-use developments) This vehicle does not require the property to be a single parcel such as an apartment building. The RE funds that we manage are all single family property funds.
Advantages: Diversification across multiple properties and markets, managed by experienced professionals, and usually more passive. Vacancy and repairs are spread across the entire investor pool vs just a single investor.
Some Considerations: Limited control over specific assets but depreciation of the assets can be passed through to the investors through the K1. There is virtually no option to 1031 out of this in the future, as the only mechanism would require the entire investor pool to stay on board and agree to all purchase new properties with proceeds.  

2. Buying a Single Family Home as an Investor

Structure: You personally purchase and own one or more homes and rent them out.
Advantages: Full control over property selection, financing, renovations, and management. Potential tax benefits like depreciation and mortgage interest deductions are much greater with this avenue. There is also the potential for “step up basis” upon heirship of these for your future generations. 
Some Considerations: Requires hands-on involvement and direct communication with a property manager. Can be less diversification since each capital investment is tied to a single property/market.  This can be overcome by investing in multiple homes in different markets. Exposure to tenant turnover and maintenance costs is more directly felt since it is not spread out over multiple properties/investors.

3. Investing in a Real Estate Syndication

Structure: A group of investors pools capital to acquire a larger single property (often multi-family or commercial) led by a sponsor or general partner who manages the deal.
Advantages: Access to bigger projects than most individual investors could buy alone. The sponsor handles the day-to-day work. Potential for higher returns from larger properties.
Some Considerations: Typically illiquid, meaning your money is tied up for the project’s duration. You have a limited vote on path of the project which can lead to exposure for cash calls and such. You are a passive limited partner with no control over operations. The investment depends heavily on the sponsor’s expertise.